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    ABI News Release

    Thursday, 09 December 2004 Ref: 113/04

    Government change of approach on with-profits tax is 'step forward'

    (184 words)

    The Government’s decision to allow more time for consultation on its proposals for taxation of the with profits industry is a significant step forward for companies and their policyholders says the ABI (Association of British Insurers). The proposals have been removed from the new regulations now before Parliament and will be debated instead as part of next year’s Finance Bill.

    The original proposals were announced in last week’s Pre-Budget Report. The Government’s change of strategy follows representations earlier this week from the ABI and leading insurance companies. Earlier this week, the ABI described the Government’s then attitude as ‘wrong in principle and wrong in practice.’

    Peter Vipond, the ABI’s Director of Financial Regulation and Taxation, said today:

    “Following strong representations from the ABI and members of the life insurance industry, the Government now recognises our concerns and has agreed to consult with the industry before issuing new legislation changing the method of taxing surplus assets of life funds.

    “We are satisfied that the Government appreciates the seriousness of the industry's concerns and welcome the opportunity for proper consultation in order to achieve better legislation.”

    - ENDS -

    Notes for Editors

    1. Enquiries to: 
     Alan Leaman  020 7216 7440 (Mobile: 07957 482330)
     Malcolm Tarling  020 7216 7410 (Mobile: 07776 147667)
     Lucy Butler  020 7216 7411 (Mobile: 07712 841184)
     Dinah Lartey  020 7216 7394 (Mobile: 07712 841183)

    2. The ABI is the trade association for Britain’s insurance industry. Its more than 400 member companies provide over 97% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold more than a fifth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

    3. An ISDN line is available for broadcasts. 

    Copies of all ABI news releases, together with other information from the Association, can be seen on our website http://www.abi.org.uk

    113/04



    Notes